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Cloud Computing Spending Continues to Rise

Digital First thinks that we are still only on the cusp of seeing a dramatic shift from traditional on-premise data centres to cloud infrastructure, accessible anywhere, anytime and more securely.  The trend continues with over £250bn will be spent on public cloud services in 2016, marking a notable 17.2 per cent rise over 2015.

Data from Gartner found that infrastructure-as-a-service offerings will account for the biggest chunk of the market at 42.8 per cent.

However, software-as-a-service will be the biggest growth area, expected to rise 21.7 per cent on 2015 to over £40bn.

Sid Nag, a research director at Gartner, explained that the growth underlined how many organisations are willing to use public cloud services to host and run digital initiatives, not least to save money.

“Growth of public cloud is supported by the fact that organisations are saving 14 per cent of their budgets as an outcome of public cloud adoption,” he said.

However, Nag noted that many firms have still not moved to the public cloud, despite their willingness, suggesting that there is still plenty of growth in the market for the years ahead.

“There’s no question that there’s s great appetite at organisations to use cloud services, but there are still challenges as they make the move to the cloud,” he said.

“Even with the high rate of predicted growth, a large number of organisations still have no current plans to use cloud services.”

Security and privacy concerns remain the biggest barriers to adoption, despite the best efforts of cloud vendors like Amazon Web Services, Google and Microsoft to allay such fears.

“More education is needed to help organisations overcome the hype associated with security concerns,” added Ed Anderson, a research vice president at Gartner.

“This should be a key area of focus for providers in working with their clients to unlock the benefits of public cloud services.”

The figures from Gartner certainly chime with other data in the market, notably from AWS which is by far the biggest public cloud provider and posted revenues for the division of over £3bn for its most recent quarter.

Microsoft also revealed that the Azure cloud platform is seeing huge demand, with revenues growing 102 per cent in its most recent financial period.

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